Firm to pay $5.57B for staffing-services provider
Private equity firm KKR & Co. will buy Envision Healthcare Corp. for $5.57 billion plus debt, after a lengthy sale process by the hospital staffing and surgical center company.
Including debt, the all-cash purchase will value Envision at $9.9 billion, the health care company said in a statement Monday. Envision said the $46-a-share price represents a 32 percent premium to its stock price in November, when it announced it was reviewing strategic alternatives.
The review kicked off for the Nashville, Tenn.-based company after activist investor Starboard Value, run by Jeff Smith, revealed a stake and said it would make an attractive takeover target. Corvex Management, another activist firm and shareholder, reduced most of its holdings in the first quarter.
In the months after the review started, the physician-services provider was said to draw a parade of interested parties. They included strategic buyers such as UnitedHealth, as well as private-equity consortiums comprised of Hellman & Friedman, Onex Corp. and Clayton Dubilier & Rice, and one led by Carlyle Group.
KKR is already familiar with Envision. The asset firm’s portfolio company, Air Medical, acquired Envision’s medical transport subsidiary American Medical Response in a $2.4 billion deal announced last year.
The company said the KKR deal values Envision at 10.9 times its adjusted earnings before interest, taxes, depreciation and amortization for the trailing 12 months.
Health services assets have become hot targets for buyers.
Last year, KKR finished raising money for a $1.45 billion healthcare fund dedicated to growth stage companies. Health insurance and services giant UnitedHealth has acquired a string of medical practices, and drugstore chain CVS Health Corp. is buying insurer Aetna.